Supersafe Ways to Stash Wads of Cash
Expanded deposit insurance is just one of your new tools.
By Anne Kates Smith, Senior Associate Editor
From Kiplinger's Personal Finance magazine, December 2008
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Many depositors feel safer now that the Federal Deposit Insurance Corp. has, at least through 2009, raised insurance limits from $100,000 to $250,000 per individual account. Joint accounts are covered at $250,000 per co-owner; retirement accounts, up to $250,000; and trust accounts, up to $250,000 per beneficiary.
Not enough? Stretch your coverage by spreading cash among several banks. A couple of services will help you do this without sacrificing your shoe leather.
The Certificate of Deposit Account Registry Service, or CDARS, can cover up to $50 million in deposits, working with a network of some 2,500 banks. To find a CDARS member bank near you, visit www.cdars.com. You can choose maturities from four weeks to five years. The home bank will split your deposit among as many banks as necessary, and you can strike any you don't want to use (one you're already using, for instance, lest you go over FDIC limits). You'll earn one rate (set by the home bank) and get one statement and one form at tax time.
FolioFn, an online securities firm, works with 22 banks. That means you can insure up to $5.5 million in cash held in various FolioFn accounts -- trading, retirement, trust and so on. Pending deals could push the limit to $7 million. Your cash is deposited into money-market accounts at the banks. Funds are available on demand, so the money earns a relatively low rate -- recently just 1.09% at the top end of FolioFn's range of options. You must be a member -- at a cost of $29 a month -- to use its extended FDIC coverage.
Reader Comments (3)
Posted by: Tin_Whiskers at 11/18/2008 08:54:32 AM
Your bank account may not be as safe as you think (or hope). Taking a deeper look at the legal details and the financial depth of the FDIC reveals several troubling details that call into question how the FDIC would fare during a true banking crisis. www.bitsofnews.com/content/view/7203/ How many Americans knew that the FDIC Bank Insurance Fund (BIF) was broke in 1991, to the tune of negative $7 billion(US) and also broke in 1992 to the tune of $100 million (US)? Not only was the bank insurance fund insolvent in these years, it was in debt. www.fdic.gov/about/strategic/report/98Annual/cond.html
Posted by: Truth at 05/20/2009 06:55:56 PM
If the US government failed to backstop the FDIC, in the event it became insolvent, your money wouldn't be safe anywhere in the world. The more important question isn't whether or not you would get your dollars back, it's what they would be worth. And with the drunken spending binge that Obama and the Democrats are currently taking your money on, don't expect it to be much.
Posted by: mike at 11/10/2009 03:29:18 PM
A 21-year-old kid recently won the 2009 poker WSOP....over $8 million. Where do millionaires deposit their money and not worry about $250k FDIC insured limit?? whats he gotta do, open up 32 bank accounts? thx....